TT Club to Offer Fixed Premium to All Members
12 October 2001
In October 2000 the Board of TT Club decided to review the strategic options for development of the Club. It set out to develop a long-term strategy that would ensure the continued provision of excellent service to all customers for the foreseeable future.
Over the past 12 months, with consultancy assistance from Ernst & Young, the Club has developed and evaluated a range of strategic alternatives. This process has determined that the Club is in a prime position to meet the challenge of changing market demands.
One market demand in particular is being addressed now -certainty of cost
. The Club currently retains the facility to levy supplementary premiums from its members if the need should arise. The parent Association, TT Bermuda, last made a supplementary call in 1974 and its UK subsidiary, TT Eurasia, has never made a supplementary call since its establishment in 1991. The Board has concluded that this facility is effectively redundant and should be eliminated in order to provide absolute certainty of cost.
Under the proposed arrangement, all new business and renewal premiums written by the Club will be on a fixed premium basis, and, in order to ensure fairness to all members of the Club, all unexpired policies will be automatically converted to the same basis.
The strategy also entails the closure of the Club's three open policy years. This will completely remove the option of making a supplementary call in respect of policies issued prior to the implementation of the new arrangement.
The TT Club plans to implement the changes with effect from 1 January 2002, subject to the agreement of the policyholder members of TT Bermuda and TT Eurasia, who will be asked to approve the changes in early November. If the members give their agreement, the Club will then apply for regulatory approval of the changes in the UK and elsewhere.
The Club has developed a growth strategy that envisages significant expansion of its business within its chosen transport and logistics niche. The growth in business will come from a variety of sources and will involve investment in people, offices, product development and systems.
The Board has also evaluated the benefits of mutual ownership of the Club by the transport and logistics industry. It has reaffirmed that the TT Clubwill remain a mutual organisation
owned and controlled by its membership. The Club will retain the right to return premiums to members should the Board consider it appropriate to do so in the future.
The key benefits of mutuality are:
- Comprehensive insurance cover at a competitive price.
- Specialist underwriting and claims handling capabilities.
- Global presence via owned and partner operations.
- Financial strength built up over 33 years.
- Expert risk management and loss prevention advice.
- A philosophy based upon settling claims quickly.
Commenting on the significance of the changes, Paul Neagle, Chief Executive of the Club, remarked:
"The key driver in the Club's approach continues to be the differentiation between itself and its competitors. This change to TT's pricing mechanism allows it to continue the development of new insurance products and risk management services within its chosen niche. We are positioning ourselves to meet future market demands.
We will be offering our customers a fixed premium insurance package, backed by excellent levels of service and provided by a mutual insurer dedicated to the needs of its policyholder members. I believe this will prove to be a winning combination in tomorrow's transport and logistics market.
Note to editors:
The TT Club provides liability and equipment insurance to ship operators, stevedores, terminal and depot operators, port authorities, logistics providers, freight forwarders and other transport operators in 150 countries. The Club insures 70% of the world's container fleet, over 2000 ports and terminals worldwide as well as 4000+ transport and logistics operations around the globe. The Club's directors are drawn largely from the membership and have significant experience within the transport industry. TT Club is the transport and logistics industry's leading provider of liability and associated insurance and risk management products. To maintain this position TT will continue to maximise its value adding process with innovative concepts such as TTXpress.com, ThruCargo and TTe-claims.
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